SAN - Santander U.K. arm fined $132M for recurrent money-laundering failures

Santander UK, the British division of Spain's Banco Santander ( NYSE: SAN ), got slapped with a EUR 108M (US$132M) penalty by the U.K.'s Financial Conduct Authority over repeated anti-money laundering failures, according to a release dated Friday.

The U.K. financial watchdog pointed to the bank's failure to properly monitor hundreds of millions of pounds of problematic funds as the primary reason behind its security lapses.

Over a five year period through 2017, the lender has "serious and persistent gaps" in its anti-money-laundering controls that impacted the account oversight of over 560K business customers, the FCA explained.

One customer, in particular, opened an account as a small translations business with expected monthly deposits of EUR 5K, the agency noted. "Within six months it was receiving millions in deposits, and swiftly transferring the money to separate accounts."

Santander's ( SAN ) AML team recommended to close that account in March 2014, though "poor processes and structures meant that this was not acted upon until September 2015," so millions of pounds continued to flow through the account. The account remained open until December 2016.

The bank accepted the FCA's findings and agreed to settle in exchange for a discount of 30% in the fine.

“Santander’s poor management of their anti-money laundering systems and their inadequate attempts to address the problems created a prolonged and severe risk of money laundering and financial crime,” said Mark Steward, executive director of enforcement and market oversight at FCA.

Meanwhile, Seeking Alpha contributor The Investment Doctor took a bullish view on SAN stock, calling it a Buy, as the bank's earnings remain robust .

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